To outpace rising threats, the Division of Protection (DOD)/Division of Struggle (DOW) is reshaping federal acquisition by championing Different Transaction Agreements (OTAs) and Industrial Options Openings (CSOs) that carry innovation to the warfighter on the entrance strains quicker. This alteration embodies the administration’s intent to take a extra offensive posture in assembly warfighter wants; one which challenges the acquisition group to maneuver quicker, suppose creatively, and embrace innovation as a core mission crucial.
DOD’s Rationale for Utilizing OTAs and CSOs
On November 7, 2025, Secretary of Protection Pete Hegseth introduced a sweeping transformation of the DOD’s acquisition system, with full implementation steerage anticipated inside 180 days. The DOD is appearing with unprecedented urgency, and this transformation will affect each lively and future solicitation. The intent is evident: speed up procurement, broaden competitors, cut back regulatory drag, and make business expertise the default for assembly protection wants.
To assist this shift, contracting officers are issuing a number of requests for info (RFIs) to find out whether or not business merchandise can meet mission necessities. This once-routine course of now serves as a important validation step within the new acquisition strategy.
Underscoring this momentum, Secretary Hegseth declared,“Velocity-to-delivery is now our organizing precept.” For acquisition professionals, this assertion marks a elementary cultural reset. Traditionally, large-scale packages required 2 to three years of preparation to subject a solicitation. Even then, well timed awards had been removed from assured. To mitigate delays, companies started issuing 10-year contracts slightly than 5-year phrases.
That mindset not matches the mission. Underneath the rising Warfighting Acquisition System (the successor to the legacy Protection Acquisition System), pace, innovation, and operational readiness are the brand new benchmarks of success.
DOD’s “Industrial First” Precedence
A defining factor of the brand new Warfighting Acquisition System is the DOD’s shift to a “Industrial First” contracting philosophy. Over the previous three a long time, {industry} has outpaced the U.S. authorities in analysis and improvement by greater than $300B yearly. Slightly than making an attempt to copy this innovation internally, DOD is now directing its acquisition workforce to make use of confirmed business applied sciences first and construct solely when no viable market resolution exists. This strategy serves two strategic functions:
- Expanded entry to innovation. It opens the door for small companies with breakthrough applied sciences that can’t navigate conventional acquisition limitations.
- Integrated cross-domain capabilities. It permits massive companies that function throughout a number of mission areas to carry mature, commercially funded options instantly into the protection ecosystem.
By adopting a “Industrial First” mindset, DOD can harness the pace, funding, and creativity of the personal sector to rework the way in which the nation equips its warfighters for the challenges forward.
DOD’s Cost to Use OTAs and CSOs
The brand new Warfighting Acquisition System is directing all DOD companies and companies to make use of OTAs and CSOs wherever possible and mission-appropriate. A proper coverage framework and accompanying rules are anticipated to be issued inside the subsequent 90 days, signaling a decisive transfer towards agility and innovation throughout the acquisition enterprise.
Whereas OTAs have existed for many years, their use was traditionally restricted to analysis and educational initiatives. At present, they’re being elevated as a cornerstone of speedy prototyping and functionality improvement, significantly for participating non-traditional protection contractors who can ship breakthrough applied sciences outdoors the constraints of the Federal Acquisition Regulation.
Nonetheless, this shift additionally exposes a readiness hole. Many acquisition professionals, together with contracting officers (COs), contracting officer representatives (CORs), and program managers (PMs), have obtained solely restricted publicity to OTAs and CSOs, usually by way of primary Protection Acquisition Workforce Enchancment Act (DAWIA) coaching modules. To comprehend the total potential of those instruments, DOD personnel should transfer past idea and achieve hands-on expertise in making use of OTAs and CSOs to real-world acquisition challenges.
The Emergence of OTAs and CSOs
The resurgence of OTAs started in 2016 with the creation of the Protection Innovation Unit-Experimental (DIUx), a DOD initiative headquartered in Silicon Valley to strengthen collaboration with the nation’s most progressive expertise ecosystem. The aim was clear: establish and quickly purchase cutting-edge business capabilities to fulfill pressing protection wants.
Nonetheless, DIUx rapidly encountered the total weight of the normal acquisition paperwork. For small corporations, ready 12 to 24 months for potential authorities funding was untenable. Recognizing these limitations, the 2016 Protection Coverage Invoice expanded the DOD’s statutory authority to make use of OTAs, permitting companies to transition profitable prototypes instantly into manufacturing by way of streamlined, sole-source contracts.
To enhance this flexibility, DIUx pioneered the CSO course of, which enabled the federal government to buy business expertise at scale. The success of this mannequin drew widespread consideration, prompting different federal companies and navy companies to embed personnel at DIUx headquarters to be taught the CSO course of and replicate it inside their very own organizations.
In 2017, I had the chance to work on-site with DIUx to ascertain each an OTA and a CSO framework. The hassle confronted important cultural resistance, starting from entrenched management skepticism to funding constraints and institutional “mission rice bowls.” But, with sturdy govt backing, the initiative succeeded. Inside months, we stood up a totally operational OTA and subsequently launched a CSO, laying the groundwork for the agile acquisition practices now spreading throughout DOD.
How Firms and Authorities Can Excel within the New OTA/CSO Surroundings
With greater than 27 years of expertise within the protection acquisition system and deep experience in OTA and CSO contracting, I’m inspired by the course of the brand new Warfighting Acquisition System. Its aim of eliminating pointless paperwork and accelerating supply to the warfighter represents a long-overdue evolution in how the federal government buys innovation. Nonetheless, success will rely upon preparation, training, and adaptableness throughout each authorities and {industry}, as summarized within the suggestions under.
Suggestions for Firms
- Be taught the method. Enterprise builders, seize managers, and proposal professionals should grasp the basics of OTAs, CSOs, and Broad Company Bulletins (BAAs). These mechanisms will more and more form aggressive technique.
- Designate inside consultants. Appoint devoted OTA, CSO, and simplified acquisition specialists who can assist all divisions and function company focal factors for agile contracting.
- Leverage inside innovation. Establish prototypes, applied sciences, and business merchandise already developed throughout the enterprise. Set up a shared product database so all enterprise models can entry and align round present capabilities.
- Construct white papers and pitch briefs. Develop concise, persuasive supplies that display how your options clear up authorities mission issues. These are important for participating in OTA, CSO, and BAA processes.
- Interact early and sometimes. Monitor OTA and CSO bulletins and reply rapidly to business solicitations. Submit white papers to standing BAAs and RFIs to form necessities and validate business viability.
- Prioritize agility. The amount of RFIs will improve dramatically. Corporations that may quickly tailor responses and align business merchandise to authorities wants will keep a decisive edge.
Suggestions for Authorities
- Mandate coaching. COs, CORs, and PMs should obtain necessary coaching on OTAs, CSOs, and BAAs—not as idea, however by way of utilized, hands-on instruction.
- Construct in-house experience. Every division ought to designate OTA and CSO specialists to information program groups. A single knowledgeable for a complete company is inadequate for the size of transformation underway.
- Outline real-world challenges. Doc mission issues early and use OTA and CSO processes to crowdsource potential options. Maintain month-to-month boards throughout mission areas to floor new points and establish accessible funding.
- Foster collaboration. Technical consultants should take a extra lively position in serving to {industry} navigate distinctive deployment, safety, and accreditation processes.
- Institutionalize efficiency metrics. Set up annual goals for PMs, COs, and CORs that embody reviewing white papers, growing drawback statements, and executing a minimal variety of OTA or CSO actions per yr.
- Prototype earlier than you commit. Every time doable, pilot new necessities by way of OTAs or CSOs earlier than locking into long-term contracts, thereby lowering threat whereas validating functionality and efficiency.
Challenges and Impacts Forward
Because the DOD accelerates adoption of OTAs and CSOs, each authorities companies and business corporations will expertise rising pains alongside new alternatives. Having led and supported a number of OTA and CSO implementations from each side of the desk, I can attest that early training and proactive engagement are the surest paths to success.
Authorities Impacts
As companies and firms alter to quicker, extra versatile procurement fashions, the impacts will differ relying on how rapidly every adapts. The next define highlights key alternatives and challenges going through each authorities and {industry} individuals on this evolving setting:
Optimistic Outcomes
- Speedy entry to progressive, industry-developed capabilities that tackle quick warfighter wants.
- Value financial savings by way of prototype testing earlier than long-term commitments.
- Better leverage of private-sector R&D investments, lowering authorities improvement prices.
- Sooner deployment of life-saving applied sciences to the battlefield.
- Improved morale amongst acquisition professionals empowered to ship outcomes rapidly.
- Expanded participation from non-traditional and small enterprise innovators.
Potential Challenges
- Companies that fail to execute OTAs and CSOs threat dropping funding and management confidence.
- Elevated workload to justify acquisition approaches and handle a number of RFIs.
- Institutional resistance from legacy acquisition processes and management turnover.
- Over-customization of business options, resulting in price overruns or schedule delays.
- Missed alternatives if acquisition personnel stay untrained or risk-averse.
Company Impacts
Optimistic Outcomes
- New enterprise development pushed by progressive business off-the-shelf (COTS) and prototype options.
- Alternatives for sole-source follow-on awards following profitable pilot efforts.
- Growth into new mission areas and companies by way of scalable, business choices.
- Enhanced morale and repute by way of speedy supply of high-impact options.
Potential Challenges
- Missed alternatives by failing to watch OTA and CSO solicitations.
- Lack of follow-on work as conventional contract automobiles are phased out.
- Danger of being labeled a non-performer below new analysis standards.
- Lack of buyer confidence or market share attributable to a scarcity of agility or accreditation readiness.
- Delays attributable to restricted understanding of federal compliance requirements, resembling Danger Administration Framework (RMF) or Zero Belief.
Conclusion
Because the federal authorities reopens and implements the brand new Warfighting Acquisition System, each {industry} and authorities should act decisively. Firms with COTS options have a novel alternative to broaden their presence and assist nationwide protection goals in the event that they be taught to navigate OTA and CSO processes successfully. Authorities acquisition professionals, in the meantime, now possess the instruments to ship innovation to warfighters quicker than ever earlier than.
The success of this transformation will rely upon how rapidly all sides adapts, collaborates, and embraces a tradition of pace, flexibility, and mission focus. Those that put together now is not going to solely form the way forward for acquisition but additionally strengthen the nation’s capability to answer rising threats with unmatched agility.
By Daniel T. Minton, Principal Advisor and Authorities Contracts SME, Lohfeld Consulting Group
Daniel Minton brings greater than 27 years of federal acquisition expertise and a confirmed document of management in establishing and executing OTAs, CSOs, and BAAs. He beforehand labored on-site at DIU for a yr and continues to watch and analyze greater than 100 lively OTA, CSO, and BAA initiatives. Along with offering strategic enterprise improvement and implementation assist, he produces real-time Supply Choice Analysis Board (SSEB) analyses, delivering specialised analysis merchandise that mirror authorities SSEB requirements and instantly assist Contracting Officers in award selections.
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